Application of the “Defender” Consumer Model

Hauser, John R.; Gaskin, Steven P.

doi:10.1287/mksc.3.4.327

Cited by 84 publications

(24 citation statements)

References 34 publications

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“…While this is the profit maximizing position, Hauser and Shugan conclude that profit is alvvays decreased by a competitive new brand. The consumer model has been tested empirically (Hauser and Gaskin 1984) and the DEFENDER model has been applied to a number of managerial situations (Hauser 1988). However, the results might depend on market conditions.…”

Section: 12mentioning

confidence: 99%

Incumbent defense strategies against new product entry

Gatignon

Robertson

Fein

1997

International Journal of Research in Marketing

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The objective of this study is to estimate the effectiveness of different defense strategies when faced with a new product introduction by a competitor. Using a sample of in cumbentsacross a wide range of industries, we find that faster reactions to the new entrant have a positive impact on the perceived success of the defense strategy. However, the greater the breadth of reaction (number of marketing mix instruments used), the less successful is the defense. The ability of an incumbent to maintain its market position is also significantly affected by industry characteristics and the degree of competitive threat posed by the new product entry. A working paper in the INSEAD Working Paper Sertes is intended as a means whereby a faculty researcher's thoughts and findings may be communicated to interested readers. The paper should be considered preliminary in nature and may require révision. INCOMBENT DEFENSE STRATEGIES AGAINST NEW PRODUCT ENTRY AbstractThe objective of this study is to estimate the effectiveness of different defense strategies when faced with a new product introduction by a competitor. Using a sample of incumbents across a wide range of industries, we find that faster reactions to the new entrant have a positive impact on the perceived success of the defense strategy. However, the greater the breadth of reaction (number of marketing mix instruments used), the less successful the defense. The ability of an incumbent to maintain its market position is also significantly affected by industry characteristics and the degree of competitive threat posed by the entrant. INCOMBENT DEFENSE STRATEGIES AGAINST NEW PRODUCT ENTRYThe focus of this research is on the defense strategies that incumbents use when confronted with new competitive products. The goal is to explain the success of reaction strategies, radier than to explain the likelihood of reaction, which is the more prevalent research objective in the extant literature. In other words our concem is not with whether incumbents react, but given that they react, how successful will their responses be? In particular, are faster responses likely to be more successful? Which marketing instruments should be used? Are broad responses (in ternis of number of marketing mix instruments) more successful than narrow responses?The issue of market defense has considerable managerial relevance. In general, as the success of incumbents increases within a product category, the likelihood of new entry increases and with it the need for incumbents to defend their position. In many firms, however, the bias is to develop elaborate new product launch plans but seldom to proactively specify defense plans in advance of a competitive threat (Bazerman and Carroll 1987, Robertson and Gatignon 1991).The bottom line question for managers is what defense strategies will be most effective. More specifically, the question is what responses will be most successful given a certain set of procluct category characteristics and the nature of the competitive threat. It is these mana...

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Section: 12mentioning

confidence: 99%

Incumbent defense strategies against new product entry

Gatignon

Robertson

Fein

1997

International Journal of Research in Marketing

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“…Arbitrary specification of such alternatives is possibly one of the factors which gives rise to "violations of the so-called Independence from Irrelevant Alternatives (IIA)" phenomenon in which a new alternative added to a set draws sales disproportionately from alternatives more similar to it, rather than proportionately (to choice probability) from all alternatives in the set (Wiley 1990). Prior determination of the consideration set, which results in restricting a choice model to considered alternatives only, should improve the predictability of choice models (Hauser and Gaskin 1984;Silk and Urban 1978). For example, Hauser (1978) uses a goodnessof-fit statistic to argue that the consideration set accounts for 78% of the explainable uncertainty in choice data while a logit model based upon consumer preference accounts for only 22%.…”

Section: Evidence For Consideration Setsmentioning

confidence: 99%

Consideration set influences on consumer decision-making and choice: Issues, models, and suggestions

et al. 1991

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This paper affords a stylized view of individual consumer choice decision-making appropriate to the study of many marketing decisions. It summarizes issues relating to consideration set effects on consumer judgment and choice. It discusses whether consideration sets really exist and, if so, the factors that affect their composition, structure, and role in decision-making. It examines some new developments in the measurement and modeling of consideration set effects on decision-making. The paper concludes with suggestions for needed research.Most contemporary accounts of human decision-making give a prominent role to simplification. This extends not only to the "process" presumedly used by the decision-maker in reaching a decision, where simplification acknowledges the decision-maker's efforts to make his/her task easier and more functional, but also to the models of that process proposed by those who study decision-making (Wright 1975). Simple models are to be preferred because they are tractable, a fact that is particularly important when the analyst's task is to make predictions for large numbers of consumers. On the other hand, many behavioral scientists have questioned the adequacy of such models as explanation since they often find a process *The authors wish to acknowledge the numerous ideas and perspectives contributed by the other members of the Banff Symposium workshop:

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“…The literature provides various ways for deriving per dollar multidimensional maps. Hauser and Gaskin (1984) The authors express sincere gratitude to Ben Bode, Hugo van der Hoest, and the anonymous JMR reviewers for their particularly valuable contributions lo this study. sectional survey data.…”

Section: Full-information Maximum Likelihood Estimation Of Brand Posimentioning

confidence: 97%